Massachusetts is spending about $75 million each month on state-run shelters, a massive jump in expenses that comes as Gov. Maura Healey’s administration is expected to run out of cash for emergency services in early to mid-April without another financial infusion.
Beacon Hill lawmakers have spent most of the new year putting together a plan to pay soaring shelter bills just as state revenues have consistently come in below expectations, Washington has offered no help, and demand on services continues to persist at historic levels.
With cash likely running out ahead of an April time window, the Legislature is now locked in negotiations over a new spending plan that could allow Healey to access dollars at a critical moment. Top budget writers say they are confident they can find a compromise before time runs out.
House Ways and Means Chair Aaron Michlewitz said he understands the need to produce a deal on a spending bill “as quickly as possible.”
“I’m hopeful that once we get into this discussion with our counterparts that we’ll be able to produce something with time to spare in terms of any funding running out,” the North End Democrat told the Herald Friday afternoon.
A spokesperson for the Executive of Administration and Finance, Matt Murphy, did not say if the Healey administration has a working date for when money could run out.
“We don’t have any further updates at this time. We are encouraged by the progress the Legislature has made and look forward to working with them to finalize the supplemental budget as soon as possible,” he said in a statement.
The Senate voted Thursday to give Healey access to up to $840 million over fiscal years 2024 and 2025 to pay for shelter costs while the House approved earlier this month a $245 million injection only for this fiscal year. Both bills cap time in shelters at nine months, with different rules for extending stays.
Lawmakers have so far handed the Healey administration $575 million in fiscal year 2024 to deal with a shelter crisis that has been exacerbated by an influx of migrants fleeing dangerous conditions in their home countries.
In a report released last week, the administration said it had already spent $427 million on emergency shelter services as of March 7. An updated report that could shed light on the latest financial figures is expected to be released next week.
Senate Ways and Means Chair Michael Rodrigues said his “read” of the situation is money could dry up in the first or second week of April, a timetable that puts a quickly ticking clock on House-Senate deliberations on additional shelter spending.
“This current rate of spending is truly unsustainable, and it may further hamper our ability to address time-sensitive needs facing the commonwealth if we don’t act. With the failure of a federal government to act in aid in this crisis, the responsibility unfortunately falls upon our shoulders here in the commonwealth,” he said during a Thursday Senate session.
More than 7,500 families with children and pregnant women are living in a sprawling network of hotels, motels, and traditional shelters across Massachusetts. Half are considered to be migrants.
Some shelter guests receive a range of services from health care to transportation and food to legal help. The Healey administration has projected it will spend $932 million this fiscal year and $915 million next fiscal year on emergency assistance shelters.
In years past, normal emergency shelter capacity hovered around 4,100 families and cost taxpayers about $27 million per month, Rodrigues said.
That escalated to $45 million a month in August 2023, when Gov. Maura Healey declared a state of emergency as shelters were quickly filling up, and, according to Rodrigues, again to $75 million a month as the stem of new arrivals kept up.
The state could be doling out as much as $78 million per month on shelter needs in fiscal year 2024 and there are “only so many levers” to control the crisis, said Doug Howgate, president of the Massachusetts Taxpayers Foundation.
Howgate said lawmakers need to be “laser-focused” on managing costs and getting them back down to a more “sustainable level.”
But if they were to stay at the roughly $900 million rate the administration expects for fiscal years 2024 and 2025, Howgate said, “You’d have to figure out a way to build that into the (annual) budget.”
“I think if you look at the budget this year, if you had to just immediately increase that line item by a further $600 million, which is what it would take to get up to the $900 (million), you’d be faced with some really, really tough decisions and some really bad cuts to do something like that,” he said.
During the Thursday debate on the Senate’s shelter funding bill, Rodrigues said the state is spending roughly $10,000 per family in shelter each month.
“This continued wave of migrants seeking shelter is not going away anytime soon, and presents immense challenges for our communities. Currently, the projected cost of the state’s emergency shelter program is on an unsustainable trajectory,” he said.
Kelly Turley, associate director at the Massachusetts Coalition for the Homeless, said that calculation may be an oversimplification of monthly costs that are “a little more nuanced.”
“There’s money going to other services,” she said Friday. “I think $75 million a month is right but not necessarily for each family because … that’s including money for welcome centers, the National Guard, clinical assessment sites, then the overflow sites.”
